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Key Features of SBI Business Loan with Overdraft (OD) Facility

  • Types of Overdraft Facilities:
    • Simplified Small Business Loan (SSBL): A dropline overdraft facility designed for SMEs to build current and fixed assets. It supports businesses in manufacturing, trading, or services.
    • SME Gold Loan: An overdraft/demand loan facility against gold ornaments or jewelry for MSMEs, ideal for quick liquidity.
    • Business Correspondents Overdraft: Offers overdraft to National/State-level Business Correspondents to meet working capital needs, enhancing financial inclusion.
    • Asset-Backed Loan (ABL - Saral): A dropline overdraft for businesses needing funds for capacity expansion, modernization, or working capital, secured by immovable property.
    • Arthiyas Plus: Overdraft for commission agents in retail trading to meet working capital requirements.
    • SME Marble Plus: Overdraft for units in marble, quartz, and stone-based industries for working capital or capital expansion.
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  • Loan Amount: Minimum: Ranges from ₹10 lakh (e.g., SSBL, ABL Saral) to ₹25 lakh for some schemes like Business Correspondents. Maximum: Up to ₹5 crore for SSBL and ABL Saral, ₹50 lakh for SME Gold Loan, and ₹2.5 lakh for Business Correspondents (based on commission). Higher limits (up to ₹20 crore) may be considered for asset-backed loans in major cities. The loan amount is often tied to factors like average monthly balance, commission earned, or collateral value (e.g., 60% LTV for immovable property).
  • Interest Rates: Competitive rates linked to External Benchmark Lending Rate (EBLR) for MSMEs (Repo Rate + 2.65%) or 6-month Marginal Cost of Funds Based Lending Rate (MCLR) for non-MSMEs. SME Gold Loan: 9.55% (EBR + 0.40%), SSBL: Linked to MCLR, starting from 11.10% p.a. Rates vary based on borrower’s credit rating, collateral coverage, or scheme-specific terms.
  • Collateral and Security: Secured Overdrafts: Require collateral like immovable property (SARFAESI-compliant, minimum 40–50% of loan amount for SSBL and Marble Plus) or gold ornaments (SME Gold Loan). Unsecured Options: Some schemes, like Business Correspondents, are collateral-free and covered under the Credit Guarantee Fund for Micro Units (CGFMU).
  • Margin Requirements: 10% for SSBL, nil for certain overdrafts like Business Correspondents, and up to 25% for others depending on the loan scheme and risk profile.
  • Repayment Tenure: Dropline Overdraft: 12 months to 180 months (15 years), with a moratorium of up to 18 months (interest serviced monthly during moratorium). Running Account: Renewable annually, subject to satisfactory account conduct. SME Gold Loan: Up to 5 years, based on repayment capacity. No prepayment penalties for most overdraft facilities.
  • Purpose: Funds can be used for working capital, capacity expansion, modernization, asset acquisition, or general business needs (e.g., inventory, payroll, or equipment). Specific schemes also cater to niche sectors like healthcare, marble processing, or export financing.
  • Processing Fees and Charges: Processing fees: 1% of the loan amount (up to ₹10 lakh for some schemes) or nil for certain overdrafts like SME Gold Loan. Other charges (e.g., documentation, inspection) apply as per bank guidelines. No prepayment penalties for most overdraft facilities.
  • Eligibility: Business Type: Proprietorships, partnerships, private/public limited companies, MSMEs, self-employed individuals, and professionals (e.g., CAs, doctors). Business Vintage: Minimum 3–5 years in the same locality for SSBL; 2 years as a current account holder for some schemes. Age: Applicant aged 18–65 years at loan maturity. Financial Criteria: Minimum average monthly balance of ₹1 lakh (SSBL), good CIBIL score, and satisfactory repayment history.
  • Documentation: Identity proof, address proof, business proof (GST registration, ITR, balance sheet), and bank statements. Specific schemes may require additional documents like commission records for Business Correspondents.
  • Application Process: Online: Apply via SBI’s official website (under “Business” > “SME” > specific loan scheme) for pre-approved offers. Offline: Visit an SBI branch with relevant documents. Minimal documentation for pre-approved offers; otherwise, bank statements and business proofs are required.
  • Additional Benefits: Flexible Usage: Funds can be reused as a revolving credit line, with interest charged only on the utilized amount. Collateral-Free Options: Available for MSMEs under schemes like MUDRA or CGTMSE, reducing entry barriers. Special Schemes: Support for women entrepreneurs (e.g., Stand-Up India) with lower rates and tailored terms. Quick Processing: Online applications and pre-approved offers ensure faster disbursal.
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Benefits of SBI Business Loan Overdraft

  • Flexible Fund Access: Overdraft allows businesses to withdraw funds as needed up to the approved limit, providing flexibility to manage cash flow fluctuations. Pay interest only on the amount utilized, not the entire sanctioned limit, reducing borrowing costs.
  • Supports Working Capital Needs: Ideal for meeting short-term operational expenses like inventory purchase, payroll, rent, or supplier payments. Schemes like Business Correspondents Overdraft and Arthiyas Plus specifically address working capital for niche sectors.
  • Versatile Usage: Funds can be used for diverse purposes, including capacity expansion, modernization, asset acquisition, or general business needs (e.g., marketing, equipment upgrades). Specialized schemes like SME Marble Plus and SME Gold Loan cater to industry-specific requirements.
  • Collateral-Free Options: Certain overdrafts, like those under MUDRA or CGFMU schemes, are collateral-free, reducing barriers for small businesses.
  • Competitive Interest Rates: Rates linked to External Benchmark Lending Rate (EBLR) or Marginal Cost of Funds Based Lending Rate (MCLR) are often lower than unsecured personal loans.
  • Long and Flexible Repayment: Dropline overdrafts (e.g., SSBL, ABL Saral) offer tenures up to 15 years with moratorium periods (up to 18 months) for easier repayment planning.
  • Quick Liquidity: Schemes like SME Gold Loan provide fast disbursal against gold ornaments, ideal for urgent funding needs. Pre-approved offers via SBI’s YONO app or online portal streamline the application process access to funds.
  • Tailored for Diverse Businesses: Specific schemes cater to unique sectors, such as marble/stone industries (SME Marble Plus), commission agents , or financial inclusion facilitators.
  • Low Processing Costs: Minimal or no processing fees for select schemes (e.g., SME Gold Loan). Fees capped at 1% of the loan amount for others, making it cost-effective compared to other financing options.
  • Enhances Business Growth: Funds can be used for expansion, modernization, helping businesses scale operations. Overdraft acts as a revolving credit line, ensuring continuous access to capital for growth opportunities.
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How to Apply for SBI Business Loan Overdraft

  • 1. Gather Required Documents
    • Common Documents:
      • Identity Proof: Aadhaar, PAN card, passport, or voter ID.
      • Address Proof: Utility bill, rental agreement, or Aadhaar.
      • Business Proof: GST registration, Udyam certificate (for MSMEs), shop license, or partnership deed.
    • Financial Documents:
      • Last 2–3 years’ ITR with profit/loss and balance sheet.
      • 6–12 months’ bank statements (preferably SBI current account).
      • Audited financials for loans above Rs. 50 lakh.
    • Loan Application Form: Available online or at SBI branches.
    • Scheme-Specific Documents:
      • SME Gold Loan: Gold valuation certificate and ownership proof.
      • Business Correspondents: Commission statements and agreement with the bank.
      • ABL Saral: Property documents (sale deed, title deed, valuation report) for collateral.
      • SSBL/Marble Plus: Proof of business operations in the same locality for 3–5 years.
    • Additional Documents (if applicable):
      • KYC of partners/directors for partnerships or companies.
      • Project report or business plan for large loans.
  • 2. Choose Application Method
    • Option A: Online Application
      • Via SBI Official Website: Visit SBI’s SME Loan Page. Navigate to “Loans” or “Overdraft Facilities” and select the desired scheme (e.g., SSBL, ABL Saral). Click “Apply Now” or “Online Application” (if available for the scheme). Log in with your SBI internet banking credentials or register as a new user. Fill out the application form with personal, business, and financial details. Upload scanned copies of required documents (e.g., KYC, financials, collateral proofs). Submit the application and note the application reference number for tracking.
      • Benefits of Online Application: Faster processing, especially for pre-approved offers. Minimal physical documentation. Real-time tracking of application status.
    • Option B: Offline Application (Branch Visit)
      • Locate the nearest SBI branch or SME-focused branch via SBI’s Branch Locator. Request the business loan overdraft application form for the specific scheme. Fill out the form with details like loan amount, business profile, and collateral (if applicable). Submit the form along with physical copies of all required documents. The branch may schedule a business premises visit or collateral valuation (e.g., for ABL Saral or SME Gold Loan). Receive an acknowledgment receipt with an application reference number.
      • Benefits of Offline Application: Personalized guidance from bank staff. Suitable for complex applications requiring collateral or large loan amounts.
  • 3. Application Processing and Verification
    • Bank’s Process: SBI verifies the submitted documents and assesses eligibility based on credit score, business financials, and collateral (if applicable). For secured loans (e.g., ABL Saral), a property valuation or legal verification may be conducted. For schemes like SME Gold Loan, gold appraisal is done by an authorized valuer.
    • Credit Assessment: The bank evaluates repayment capacity, business vintage, and cash flow. Schemes like SSBL may require a minimum average monthly balance (e.g., Rs. 1 lakh).
    • Timeframe: Pre-approved offers: 1–3 days for disbursal. Standard applications: 7–15 days, depending on document verification and collateral appraisal.
  • 4. Loan Approval and Disbursal
    • Upon approval, SBI issues a sanction letter detailing the overdraft limit, interest rate, tenure, and terms. Sign the loan agreement and complete any additional formalities (e.g., hypothecation of assets or property mortgage for secured ODs). The overdraft facility is activated in your SBI current account, allowing withdrawals up to the approved limit. Funds are accessible immediately for running overdrafts or post-moratorium for dropline overdrafts.
  • 5. Track and Manage the Loan
    • Use SBI’s internet banking, YONO app, or branch services to monitor overdraft usage, interest accrued, and repayment schedules. For dropline overdrafts (e.g., SSBL), ensure timely repayment of equated monthly installments (EMIs) or interest during the moratorium. For running overdrafts (e.g., Business Correspondents), maintain satisfactory account conduct for annual renewal.

Eligibility Criteria for SBI Business Loan Overdraft

  • Applicant Type: Individuals, proprietorships, partnerships, private/public limited companies, or self-employed professionals (e.g., CAs, doctors, architects). Must be engaged in manufacturing, trading, or service activities, including MSMEs or specific sectors like commission agents or marble industries.
  • Age: Applicant aged 18–65 years at the time of loan maturity (some schemes may allow up to 70 years with co-applicant).
  • Business Vintage: Minimum 3–5 years of operation in the same locality for most schemes (e.g., SSBL, SME Marble Plus). Exceptions: 2 years as an SBI current account holder for schemes like Business Correspondents Overdraft.
  • Financial Requirements: Minimum Average Monthly Balance (AMB): Rs. 1 lakh in SBI current account for schemes like SSBL. Credit Score: Good CIBIL score (preferably above 700) with no defaults or adverse credit history. Turnover/Income: Positive cash flow and profitability as per the last 2–3 years’ ITR, balance sheet, or bank statements. Repayment Capacity: Demonstrated ability to service interest and/or EMIs, assessed via financials.
  • Banking Relationship: Preferably an existing SBI current account holder for at least 6–12 months. Satisfactory account conduct with no cheque bounces or irregular transactions.
  • Documentation: Valid KYC documents (Aadhaar, PAN, passport, etc.), business proof (GST registration, Udyam certificate), and financials (ITR, bank statements). Collateral documents (e.g., property deeds, gold ownership proof) for secured overdrafts.
  • Scheme-Specific Eligibility Criteria
    • Simplified Small Business Loan (SSBL): Business Type: SMEs in manufacturing, trading, or services. Business Vintage: Minimum 5 years in the same locality. Financials: AMB of Rs. 1 lakh in SBI current account; turnover to support loan repayment. Collateral: Immovable property (SARFAESI-compliant, covering at least 40–50% of loan amount). Loan Amount: Rs. 10 lakh to Rs. 5 crore.
    • SME Gold Loan: Business Type: MSMEs needing quick liquidity. Collateral: Gold ornaments/jewelry (minimum 18–22 carat, appraised by SBI-approved valuer). Business Vintage: No strict vintage requirement, but stable business operations preferred. Loan Amount: Up to Rs. 50 lakh, based on 75–80% loan-to-value (LTV) ratio of gold. Applicant: Proprietor, partner, or director with verifiable business activity.
    • Business Correspondents Overdraft: Business Type: National/State-level Business Correspondents facilitating financial inclusion. Business Vintage: Minimum 2 years as an SBI current account holder. Financials: Commission income to support overdraft limit (e.g., up to 12 times average monthly commission, max Rs. 2.5 lakh). Collateral: Collateral-free, covered under Credit Guarantee Fund for Micro Units (CGFMU). Loan Amount: Rs. 25,000 to Rs. 2.5 lakh.
    • Asset-Backed Loan (ABL Saral): Business Type: Businesses needing funds for working capital, expansion, or modernization. Business Vintage: Minimum 3 years of stable operations. Collateral: Immovable property (SARFAESI-compliant, minimum 60% LTV). Financials: Strong financials with audited balance sheets for loans above Rs. 50 lakh. Loan Amount: Rs. 10 lakh to Rs. 5 crore (up to Rs. 20 crore in major cities).
    • Arthiyas Plus: Business Type: Commission agents in retail trading (e.g., agricultural mandis). Business Vintage: Minimum 3 years in the same line of business. Financials: Turnover and commission income to justify working capital needs. Collateral: May require property or hypothecation of receivables. Loan Amount: Based on business scale, typically up to Rs. 1 crore.
    • SME Marble Plus: Business Type: Units in marble, quartz, or stone-based industries (mining, processing, trading). Business Vintage: Minimum 3–5 years in the same locality. Collateral: Immovable property covering at least 50% of loan amount. Financials: Stable turnover and cash flow to support capital or working capital needs. Loan Amount: Rs. 10 lakh to Rs. 5 crore.
    • Repayment History: A clean track record of timely loan repayment, whether with SBI or other financial institutions, enhances the approval chances. SBI prefers applicants with no history of defaults or delayed payments.
    • Geographic Location: Depending on the location of the business, specific regional conditions may apply. Businesses located in Tier 2 or Tier 3 cities may have different eligibility requirements.
    • Online Banking Activity: Active use of SBI's digital platforms like YONO and online banking can positively influence eligibility, especially for pre-approved loan offers.
    • Industry-Specific Criteria: Certain industries (e.g., retail, manufacturing) may have specific loan offers or relaxed eligibility criteria depending on SBI's internal policies and regional market conditions.
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Documents Required for SBI Personal Loan with OD Facility

  • For Regular Applications (Non-Pre-Approved Loans)
    • Application Form: Duly filled and signed loan application form (available on SBI's website, YONO app, or at branches). 2 passport-sized photographs to be attached with the form.
    • Identity Proof (Any one of the following): Aadhaar Card, PAN Card (mandatory for loan processing and credit checks), Passport, Voter ID, Driving License, Government-issued photo ID
    • Address Proof (Any one of the following): Aadhaar Card, Passport, Utility Bills (electricity, water, or gas bill, not older than 3 months), Rental Agreement, Property Tax Receipt, Voter ID, Driving License
    • Income Proof: Salary Slips for the last 3-6 months (to verify income stability). Bank Statement of the salary account (last 6 months, preferably SBI account, showing salary credits). Form 16 or Income Tax Returns (ITR) for the last 1-2 years (to confirm net income). Employment Certificate or offer letter (optional, if requested by SBI to verify employment).
    • Other Documents (if applicable): Standing Instruction (SI) Form: For automatic EMI deductions from the SBI salary account. Loan Agreement: Signed agreement provided by SBI after approval. Additional documents may be requested for specific cases (e.g., proof of relationship with employer for corporate salary accounts).
    • Credit Report (Optional): SBI may check the CIBIL score and credit report during the assessment process. A healthy score improves loan approval chances.
    • KYC Compliance Confirmation: Ensure your PAN, Aadhaar, and mobile number are linked and updated in your SBI records for faster processing and digital verification.
    • Photocopy Self-Attestation: All photocopies of documents submitted must be self-attested (signed) by the applicant.
  • For Pre-Approved Loans (via YONO App or SMS)
    • No Physical Documentation Required: If you're eligible for a pre-approved personal loan (typically for Diamond or Platinum Salary Package account holders), no documents are needed. SBI uses existing customer data (linked to your SBI salary account, PAN, and Aadhaar) for verification. Apply via the SBI YONO app in 4 clicks or after confirming eligibility by sending "PAPL <last 4 digits of account number>" to 567676.

Factors for SBI Personal Loans with OD Facility

  • Credit Score (CIBIL Score): A CIBIL score ≥750 is preferred for faster approval and lower interest rates (10.30%-15.30% p.a.). Higher scores indicate better creditworthiness, reducing risk for SBI and potentially leading to higher loan amounts or better terms. Lower scores (<700) may result in higher interest rates, stricter scrutiny, or rejection.
  • Income Level: Minimum net monthly income (NMI) of ₹15,000 is required. Loan amount is capped at 24 times the NMI, up to a maximum of ₹25 lakh. A higher income ensures a lower EMI/NMI ratio (ideally ≤50%), improving repayment capacity and eligibility.
  • Employment Status: Applicants must be salaried individuals with Diamond or Platinum Salary Package accounts at SBI. Stable employment (minimum 1-2 years with the current employer) enhances eligibility. Employees of reputed organizations (e.g., government, PSUs, or large corporates) may receive preferential treatment, such as lower rates or faster processing.
  • Age: Applicants must be between 21 and 58 years at the time of loan application or maturity. Younger applicants with longer working years may qualify for longer tenures (up to 6 years), while older applicants may face shorter tenures based on remaining service period.
  • Existing Financial Obligations: Existing loans, credit card dues, or other EMIs impact the debt-to-income ratio. SBI ensures the total EMI (including the new loan) does not exceed 50% of NMI to avoid over-leveraging. High debt levels may lead to lower loan amounts or rejection.
  • SBI Account Relationship: Applicants with an active SBI salary account (especially Diamond or Platinum category) benefit from simplified documentation, faster processing for pre-approved loans via the YONO app, and potentially lower interest rates or waived processing fees. Long-term account holders with consistent salary credits are viewed as low-risk.
  • Loan Amount and Tenure: Loan amount: Ranges from ₹1 lakh to ₹25 lakh, depending on income, credit score, and repayment capacity. Tenure: 6 months to 6 years (72 months), influenced by age, income, and employment stability. The overdraft facility allows flexible withdrawals within the sanctioned limit, but the drawing power (DP) reduces monthly based on the EMI's principal component.
  • Interest Rates: Rates vary from 10.30% to 15.30% p.a., determined by credit score, employment type, and relationship with SBI (salary account holders may get discounts). The OD facility calculates interest on a daily reducing balance, making it cost-effective if surplus funds are deposited.

Frequently Asked Questions (FAQs)

What is an SBI Personal Loan with Overdraft (OD) Facility?
The SBI Personal Loan with Overdraft Facility, such as the SBI Xpress Flexi Personal Loan, allows borrowers to access funds up to a sanctioned limit through an overdraft account. You can withdraw funds as needed, and interest is charged only on the utilized amount, calculated on a daily reducing balance. Surplus funds can be deposited to reduce interest costs, and withdrawals are allowed within the available drawing power.
Who is eligible for an SBI Personal Loan with OD Facility?
  • Occupation: Salaried individuals with a Diamond or Platinum Salary Package account at SBI.
  • Age: 21 to 58 years at the time of loan application or maturity.
  • Net Monthly Income (NMI): Minimum ₹15,000.
  • CIBIL Score: Preferably ≥750 for faster approval.
  • EMI/NMI Ratio: EMI should not exceed 50% of NMI.
  • Employment: Minimum 1–2 years with the current employer (govt/PSU employees may have relaxed criteria).
What is the loan amount and tenure for the OD facility?
  • Loan Amount: ₹1 lakh to ₹25 lakh, capped at 24 times the net monthly income.
  • Tenure: 6 months to 6 years (72 months), or the remaining service period, whichever is lower.
What are the interest rates for SBI Personal Loans with OD?
Interest rates range from 10.30% to 15.30% p.a. depending on your credit score, employment type, and your relationship with SBI. Interest is calculated on a daily reducing balance.
How does the overdraft facility work?
The loan is sanctioned as an overdraft account. Withdrawals are allowed up to the sanctioned limit. The drawing power reduces monthly. Deposits reduce interest costs. Even if the account is in credit, EMIs continue till full repayment.
What documents are required to apply?
For regular applications:
  • Application Form with 2 photos
  • Identity & Address Proof: Aadhaar, PAN (mandatory), utility bills, etc.
  • Income Proof: Salary slips (last 3–6 months), 6 months’ bank statement, Form 16
  • Employment Proof: ID card or employment certificate
For pre-approved loans via YONO: No documentation required.
How can I apply for an SBI Personal Loan with OD Facility?
Online: Visit onlineapply.sbi.co.in
YONO App: Check “Pre-Approved Loans” section
Offline: Visit nearest SBI branch
SMS: Send “PAPL <last 4 digits of account number>” to 567676
Are there any processing fees or other charges?
  • Processing Fees: Up to 1.50% of loan amount (₹1,000–₹15,000) + GST
  • Waivers: 50% off for govt employees or CIBIL ≥800, 0% till 31 Mar 2025 (Festive Dhamaka)
  • Foreclosure Charges: 3% for some schemes (waived under special conditions)
  • Penal Charges: 2.40% p.a. (up to 60 days), 5% p.a. (beyond 60 days) on irregular amounts
Is collateral or a guarantor required?
No. The loan is unsecured and granted based on income and credit score.
How long does it take to get the loan disbursed?
  • Pre-Approved Loans via YONO: Instant
  • Regular Applications: 2–7 working days
Can I deposit extra funds into the OD account?
Yes. Depositing surplus funds reduces the outstanding balance and interest. You can withdraw later if needed, within the limit.
What is the benefit of the OD facility compared to a regular personal loan?
  • Withdraw as needed
  • Pay interest only on used amount
  • Deposit anytime to save interest, no prepayment penalties
Can I check eligibility for a pre-approved loan?
Yes:
  • Via YONO App
  • SMS “PAPL <last 4 digits of account number>” to 567676
  • Use eligibility calculator on sbi.co.in
What happens if I miss an EMI?
  • Penal interest: 2.40% to 5% on the irregular amount
  • Negative CIBIL impact
  • Possibility of legal action for prolonged defaults
Can I use the loan for any purpose?
Yes. It's an unsecured loan for any personal need—medical, wedding, travel, debt consolidation, home renovation, etc.

List OF SBI Business Loan OD Banks

  • SBI Simplified Small Business Loan
  • SBI PM Mudra Yojana Loan
  • SBI Loan Against Property
  • SBI Stand Up India Loan
  • SBI SME Finance for CA Firm
  • SBI Warehouse Receipt Finance
  • SBI SME Open Term Loan
  • SBI Construction Equipment Loan
  • SBI Supply Chain Finance
  • SBI Commercial Vehicle Loan
  • SBI Healthcare Business Loan
  • SBI Energy Efficient Products Loan